The present invention relates to internet commerce and particularly to methods and apparatus that enable efficient management of procurement transactions between buyers and suppliers in a supply chain that includes outsourcing with multiple suppliers.
Today, buyers and suppliers operate in a fast changing global environment where quantities needed, pricing, technical specifications and other supply parameters are frequently changing. The supply chain for procurement of goods and services requires economies of scale, market pricing and rapid delivery. The management of the process of procuring goods and services is known as “supply chain management”.
Supply chain management is affected, for example, by the globalization of businesses, the proliferation of product and service variety, the increasing complexity of supply networks, and the shortening of product life cycles. Market conditions are susceptible to rapid demand fluctuation, inventory buildup, price competition, and frequent specification changes. The supply chain for any particular company may be primarily internal supply. However, outsourcing is often used as an alternative to internal supply. By way of example, outsourcing is used to reduce costs, control inventories and respond to rapid demand changes. Outsourcing increasingly is involving more and more suppliers and supply chains are growing more complex.
In fast changing markets, buyers require “current” and at times “real-time” quotes and other information from suppliers that specify, among other things, accurate quantities, prices and delivery times. The ability to rapidly exchange information among buyers and suppliers is paramount to efficient supply chain management, particularly in an outsourcing environment.
The Internet is an efficient electronic link among buyers and suppliers for exchange of supply chain information. The Internet operates with open standards and permits easy, universal and secure information exchange. Many roles exist for the Internet in commerce and some of these roles have been described as “e-business”, “e-commerce”, and “internet commerce”. For purposes of the present specification, the term “internet commerce” (or “i-commerce”) is used to represent the role of the Internet in supply chain management.
“Internet commerce” enables companies, among other things, to realize greater efficiency, have better asset utilization, have faster times to market, reduce order fulfillment times, enhance customer services and penetrate new markets. The Internet provides an enormous capability for distribution of “current” information that is useful and necessary for improved supply chain management. “Current” information often must be information available on a “real-time” or near “real time” basis. The Internet makes it possible to communicate “current” information about technology changes, availability of goods and services, up-to-date prices for goods and services and other information needed to manage a supply chain. When outsourcing is employed in the supply chain, the visibility into the current status of the supply chain is more difficult and requires new and improved methods for insuring that complete, accurate and timely information is available. In the absence of such current information, the ability to react in a timely way to exceptions, abnormal events and other matters may be lost or delayed. When the time for taking action is not recognized or is delayed, supply chain management suffers and ultimately the cost of goods and services increases.
Although internet commerce simplifies many aspects of procurement, difficulties still exist and improvements are needed. One difficulty results because large numbers of suppliers and buyers are attached to the market place and each participant, whether buyer or supplier, tends to use different parameters, terminology, terms, conditions and other information unique to the particular participant. These differences among participants result in an information exchange problem.
The information exchange problem is particularly acute, for example, in the outsourcing semiconductor manufacturing industry because goods and services procured from one supplier are frequently further processed by other suppliers in subsequent downstream stages. In order to have efficient and economical supply chain management, the interrelationship among each buyer and the upstream and down stream suppliers requires an exchange of “current” information that permits real-time visibility into the status of the supply chain, fast identification of abnormal events and other information that permits exception management.
One difficulty that frustrates the good visibility necessary for supply chain management is the proliferation of different terminology and specifications used by each participant in the supply chain. While any dominating buyer (and potentially any dominating supplier) can demand conformance with its way of doing business for its own business, the semiconductor manufacturing industry as a whole remains widely fragmented without much progress toward standardization. Furthermore, this fragmentation is increasing rather than decreasing so that problems are bound to exist for many years to come. The fragmentation exists, of course, in many other industries.
Cooperative attempts have been made toward standardization in some industries. In the electronics component industry, the RosettaNet has the intent of providing industry wide standardization across the electronic components trading network. Some attempts have been made to standardize the semiconductor manufacturing industry. Notwithstanding these attempts, the semiconductor manufacturing industry remains fragmented and neither the RosettaNet nor any other standard has become widely adopted.
Accordingly, there is a great demand for improved supply chain management methods and apparatus that will operate efficiently in fragmented markets.